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Complicated business structure issue: My wife and I are both…

Customer Question

Complicated business structure issue:My wife...

Complicated business structure issue:My wife and I are both doctors. We own several rental house and our primary home.I set up a holding companyLLC. It collects the rent from the house that we personally own (I set up rental agreements between holding Co and the tenant, and I have a notarized agreement between me and the holding co to assume all liability of the rental places).The holding co owns several sub LLCs (my wife's medical practice, my medical practice, and my laundromat). EACH entity is a LLC in florida, with their own EINs, and own bank accounts.I was getting a labor attorney to vet a letter of engagement (offer letter) for a salesman. The salesman is to my hired by my medical practice LLC.In that conversation, he (the labor attorney) said that IF the employee were to sue the medical practice, he would name the holding company, its subsidiaries and my wife and I as defendants, regardless of structure and claim "Fraudulent Transfer" of funds and urge veil piercing in order to collect the most.My practice and auxiliary sources of income are growing. The structure outlined, was vetted by two CPAs and LLM attorney.Apparently, I was wrong about risk mitigation? Or was I? What is the best structure? If I own each LLC personally, wouldn't that be the same as the holding company owning subsidiaries???Thank you.Raja

I would agree with the labor attorney. You should keep all real estate property issues separate from the medical practice issue. The parent holding company can have interests in the home that is leased, but the medical practice, etc. should all be in different corporate structures. A person who tries to sue will try to name as many of the entities in order to get to any asset they can. I'm happy to discuss in more detail via phone if you like but there are additional charges. The concept is called piercing the corporate veil.

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Customer reply replied 2 years ago

does my current structure that I outlined make sense? there's a parent holding company, with subsidiaries. Is the liability really limited at the subsidiary level?

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The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).